United States Environmental Protection Agency, Region 9

Air Division

Technical Support Document

for

EPA’s Notice of Proposed Rulemaking

for the

California State Implementation Plan

Report on Reductions Achieved from Incentive-Based Emission Reduction Measures in the San 

Joaquin Valley

Prepared by: Idalia Pérez

August 2015
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Table of Contents

I. Description of SIP submittal............................................................................................... 3

II. Submittal Summary ............................................................................................................ 3

III. Emissions Reductions......................................................................................................... 4

IV. Criteria for Evaluation of Emission Reductions from Incentive Programs........................ 5

V. Review of Incentive Program Guidelines........................................................................... 6

A. Carl Moyer Program - General Requirements.................................................................... 6

B. Carl Moyer Program Off-Road Equipment: Repower, Replacement, or Retrofit .............. 9

C. Carl Moyer Program Portable and Stationary Agricultural Sources Repower Projects... 11

D. Prop 1B Program: On-Road Vehicle Replacement Projects............................................. 13

VI. EPA’s Recommendations for future Reports ................................................................... 15
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I. Description of SIP submittal

This Technical Support Document (TSD) addresses California Air Resources Board’s (CARB), 

“Report on Reductions Achieved from Incentive-Based Emission Reduction Measures in the San 

Joaquin Valley” (Emission Reduction Report).

• Adopted by ARB: October 24, 2014.

• Submitted for inclusion in the State Implementation Plan (SIP): November 17, 2014.

• Deemed complete by operation of law: May 17, 2014.

II. Submittal Summary

Between 2007 and 2011, California made six SIP submittals to address nonattainment area 

planning requirements for the 1997 PM2.5 NAAQS in the San Joaquin Valley (SJV).

1 We refer to 

these submittals collectively as the “2008 PM2.5 Plan.” On November 9, 2011, EPA approved all 

elements of the 2008 PM2.5 Plan except for the contingency measures, which EPA disapproved.2

As part of this action, EPA approved, inter alia, commitments by CARB and the San Joaquin 

Valley Unified Air Pollution Control District (SJVUAPCD) to achieve specific amounts of NOx

and PM2.5 emission reductions by 2014.3 The Emission Reduction Report quantifies and 

documents the emission reductions achieved in 2014 through disbursement of incentive funds,

which CARB is using to fulfill part of the aggregate emission reduction commitment in the 2008 

PM2.5 Plan.

The Emission Reduction Report quantifies emission reductions achieved through the 

implementation of: 

• Carl Moyer Memorial Air Quality Standards Attainment Program Guidelines (Carl 

Moyer Guidelines):

o Off-Road Equipment Repower, Replacement, and Retrofit Projects

 Part II, Chapter 5, Compression-Ignition Off-Road Equipment (2005)

 Part I, Chapter 5, Off-Road Compression-Ignition Equipment (2008)

 Part 1, Chapter 7, Off-Road Compression-Ignition Equipment (2011)

o Portable and Stationary Agricultural Source Repower Projects

 Part II, Chapter 10, Agricultural Sources (2005)

 Part I, Chapter 10, Agricultural Sources (2008)

 Part I, Chapter 10, Portable and Stationary Agricultural Sources (2011)

• Proposition 1B: Goods Movement Emission Reduction Program (Prop 1B Guidelines)

o On-Road Vehicle Replacement Projects

 Appendix A, Trucks Serving Ports and Intermodal Rail Yards (2008)

 Appendix B, Other Heavy Duty Diesel Trucks (2008)

 Appendix A, Heavy Duty Diesel Trucks (2010)

 1 76 FR 69896 at n. 2 (November 9, 2011).

2 Id. at 69924. 3 76 FR 69896, 69926 (codified at 40 CFR 52.220(c)(356)(ii)(B)(2) and 52.220(c)(392)(ii)(A)(2)). 
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The key sections of the Emission Reduction Report discussed in this TSD are:

- Section IV, Demonstration that Incentive-Based Emission Reduction Measure Meet U.S. 

EPA Requirements: describes how the program guidelines ensure that the emission 

reductions achieved by projects pursuant to them are consistent with the CAA and EPA 

guidance. 

- Section V, Emission Reduction: indicates the tons per day (tpd) of emission reductions 

for each category of projects that CARB identifies in the report. 

- Appendix H, SIP Creditable Incentive Projects in the San Joaquin Valley: lists all of the 

projects for which CARB is seeking emission reduction credit in the report.

Appendix A through Appendix E contain the applicable Carl Moyer and Prop 1B guidelines that 

we are reviewing as supporting material but not incorporating into the SIP. Appendix C contains 

the October 23, 2014 revision of the Carl Moyer 2011 Guidelines. It appears that the page 

references in Section IV of the Emission Reduction Report for Carl Moyer 2011 are for the 

version adopted on April 28, 2011 but ARB has indicated that the changes between these 

versions were administrative and did not impact emission reductions in the Emission Reduction 

Report.4

III. Emissions Reductions

Section V of the Emission Reduction Report states that the identified incentive projects have 

achieved the following amounts of emission reductions by 2014:

Program 

Guidelines

# of 

Projects

2014 Emission Reductions (tpd)

NOx PM2.5

Carl Moyer 832 3.5 0.1

Prop 1B 1454 4.4 0.1

TOTAL 2286 7.8 0.2

Only projects with a completed post-inspection as of December 31, 2013, and active through the 

entire 2014 calendar year were included. CARB ensured that the projects included in the 

Emission Reduction Report had not been previously credited towards the Contingency Measure 

SIP for the 1997 PM2.5 Standard. See Emission Reduction Report at 23 and Attachments A and B 

in U.S. EPA’s Technical Support Document for its Proposed Approval of Clean Air Act Section 

172(c)(9) Contingency Measures in the San Joaquin Valley State Implementation Plan for 

Attainment of the 1997 PM2.5 Standards, dated August 15, 2013. Appendix H.1 lists of all of the 

Carl Moyer Program projects meeting these criteria for which CARB is seeking SIP credit. The 

projects are organized by equipment category (e.g. Off-Road Equipment – Construction), project 

technology (e.g. repower) and guideline year. Appendix H.2 has similar lists for the projects 

 4 See email from S Vanderspek at CARB to I Perez at EPA, dated 07/31/2015.
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funded pursuant to the Prop 1B guidelines. For each unit for which CARB is seeking SIP credit, 

the tables include a unique project identifier, post inspection date, project life, and the NOx and 

PM2.5 tons per year emission reductions for 2014.

IV. Criteria for Evaluation of Emission Reductions from Incentive Programs

EPA evaluated the Emission Reduction Report in accordance with the following guidance 

documents, which provide EPA’s interpretation of the CAA requirements that apply to SIP 

submittals that rely on discretionary economic incentive programs (EIPs) and other 

nontraditional emission reduction programs for emission reduction credit. These guidance 

documents are non-binding and do not represent final agency action.

o “Guidance on Incorporating Voluntary Mobile Source Emission Reduction Programs in 

State Implementation Plans (SIPs),” Richard D. Wilson, Acting Assistant Administrator 

for Air and Radiation, October 24, 1997 [1997 VMEP].

o “Improving Air Quality with Economic Incentive Programs” January 2001 (EPA-452/R01-001) [2001 EIP Guidance].

o “Guidance on SIP Credits for Emission Reductions from Electric-Sector Energy 

Efficiency and Renewable Energy Measures,” Brian McLean, Office of Atmospheric 

Programs, and Steve Page, OAQPS, August 5, 2004 [2004 Electric-Sector Guidance].

o “Incorporating Emerging and Voluntary Measure in a State Implementation Plan (SIP),”

Stephen D. Page, OAQPS, October 4, 2004 [2004 Emerging and Voluntary Measures 

Guidance].

o “Guidance on Incorporating Bundled Measures in a State Implementation Plan,” Stephen 

D. Page, OAQPS, and Margo Oge, OTAQ, August 16, 2005 [2005 Bundled Measures

Guidance].

o “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs 

into State and Tribal Implementation Plans,” July 2012 (EPA-456/D-12-001a) [2012 

EE/RE Guidance].

o “Diesel Retrofits: Quantifying and Using Their Emission Benefits in SIPs and 

Conformity: Guidance for State and Local Air and Transportation Agencies,” February 

2014 (EPA-420-B-14-007) [2014 Diesel Retrofits Guidance].

The CAA explicitly provides for the use of economic incentives as one tool for states to use to 

achieve attainment of the NAAQS. See, e.g., CAA section 110(a)(2)(A) (requiring that each SIP 

“include enforceable emission limitations and other control measures, means, or techniques 

(including economic incentives such as fees, marketable permits, and auctions of emissions 

rights), as well as schedules and timetables for compliance, as may be necessary or appropriate 

to meet the applicable requirements of [the Act]”); see also section 172(c)(6), 183(e)(4). EIPs

use market-based strategies to encourage the reduction of emissions from stationary, area, and/or 

mobile sources in an efficient manner. EPA has promulgated regulations for statutory EIPs 
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required under section 182(g) of the Act and has issued guidance for discretionary EIPs.5 See 59 

FR 16690 (April 7, 1994) (codified at 40 CFR part 51, subpart U) and 2001 EIP Guidance.

Where a State relies upon a discretionary EIP in a SIP submission, EPA evaluates the 

programmatic elements of the EIP to determine whether the resulting emission reductions are 

quantifiable, surplus, enforceable and permanent. See 2001 EIP Guidance at Section 4.1. These 

four fundamental “integrity elements,” which apply to all EIPs and other incentive/voluntary 

measures relied on for SIP purposes, are designed to ensure that such programs and measures 

satisfy the applicable requirements of the Act. See id.

EPA has generally defined the four fundamental integrity elements for discretionary EIPs and 

other incentive/voluntary measures as follows:

1. Quantifiable: emissions and emission reductions are quantifiable if they can be 

measured in a manner that is reliable and replicable by different users.

2. Surplus: Emission reductions are surplus if they are not otherwise required by or 

assumed in a SIP-related program (e.g., an attainment or reasonable further progress plan 

or a transportation conformity demonstration), any other adopted State air quality 

program, a consent decree, or a federal rule designed to reduce emission of a criteria 

pollutant or its precursors (e.g., a new source performance standard or federal mobile 

source requirement); Additionally, the emission reductions are “surplus” only for the 

remaining useful life of the vehicle, engine, or equipment being replaced. 

3. Enforceable: emission reductions and other required actions are enforceable if they are 

independently verifiable; program violations are defined; those liable can be identified; 

the State and EPA may apply penalties and secure appropriate corrective action where 

applicable; citizens have access to emissions-related information obtained from 

participating sources; citizens may file suit against a responsible entity for violations; and 

the required reductions/actions are practicably enforceable consistent with EPA guidance 

on practical enforceability.

4. Permanent: emission reductions are permanent if the State and EPA can ensure that the 

reductions occur for as long as they are relied upon in the SIP; the time period that the 

emission reductions are used in the SIP can be no longer than the remaining useful life of 

the retrofitted or replaced engine, vehicle, or equipment.

See 2001 EIP Guidance at Section 4.1, 1997 VMEP at pp. 6-7, 2004 Emerging and Voluntary 

Measures Policy at pp. 3-4 and 2014 Diesel Retrofits Guidance at p. 11.

We provide below our evaluation of the Emission Reduction Report and related incentive 

program guidelines for consistency with the requirements of the Act, as interpreted in EPA 

policy on discretionary EIPs and other nontraditional emission reduction measures.

V. Review of Incentive Program Guidelines

A. Carl Moyer Program - General Requirements 

 5 A “discretionary economic incentive program” is “any EIP submitted to the EPA as an implementation plan 

revision for purposes other than to comply with the statutory requirements of sections 182(g)(3), 182(g)(5), 

187(d)(3), or 187(g) of the Act.” 40 CFR § 51.491.
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The Carl Moyer Program is implemented through a partnership between CARB and local air 

districts. CARB manages program funds and distributes them to participating air districts for 

program implementation each year; develops and revises guidelines, protocols, and criteria for 

covered projects; and determines methodologies used for evaluating project cost-effectiveness. 

Air districts follow the Moyer Guidelines to select, fund, and monitor projects in their areas. The 

Guidelines describe requirements for administrative procedures, eligibility criteria for projects in 

different source categories, cost-effectiveness criteria, and reporting practices. Section IV.A of 

the Emission Reduction Report describes the general requirements of the Moyer Program 

guidelines and how these address the four integrity elements.

Quantification

The Emission Reduction Report references and describes the formulas and data inputs that the 

guidelines require applicants to use to determine annual emissions (i.e., baseline emissions, 

based on existing equipment or new equipment certified by CARB to current emission standards) 

and annual emission reductions (i.e., the difference between baseline emissions and reduced 

emissions from new/upgraded equipment).6 Specifically, the Emission Reduction Report 

identifies the portions of the 2005, 2008 and 2011 Carl Moyer Program guidelines that contain 

the formulas, engine emission factors (including sources of these emission factors), load factors, 

and conversion factors necessary to calculate project-related emissions and emission reductions.7

 

Appendix C of each of these guidelines contains the formulas used to determine annual 

emissions and annual emission reductions based on activity data8

, including options for using 

hours of operation, fuel consumption and/or miles traveled to determine annual usage.9

 All three 

guidelines require grantees to use documented activity levels, together with the appropriate 

emission and load factors, to calculate project-related emission reductions.10 

These general provisions of the 2005, 2008 and 2011 guidelines, together with the categoryspecific provisions discussed in sections V.B and V.C below, require grantees to use wellestablished, publicly available emission factors and calculation methods and thereby ensure that 

emission reductions from off-road equipment: repower, replacement, or retrofit projects can be 

quantified using reliable and replicable methods.

Surplus

The Emission Reduction Report references and describes the requirements in the Carl Moyer 

guidelines that help ensure that emissions reductions are surplus.

11 Specifically, the Emission 

Reduction Report identifies the portions of the 2005, 2008 and 2011 Carl Moyer Program 

guidelines state that emission reductions cannot be required by any federal, state or local 

regulation, memorandum of agreement/understanding, settlement agreement, mitigation 

 6 Emission Reduction Report at 7-8, 11-12, 15, 19-20, and Appendix F. 7 Id. at 7-8. 8 Program requirements concerning activity data are discussed under “Enforceability” below. 9 Emission Reduction Report at 7-8. 10 Id. at 12. 11 Id. at 9.
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requirement, or other legal mandate in order for projects to be funded.12 All three guidelines also 

clarify how rule approval dates impact project eligibility and execution.

13 

Recordkeeping and reporting14 ensure that historic and future emission estimates correctly 

represent emissions occurring in the San Joaquin Valley. Pre-inspection requirements15 ensure 

that the unit to be replaced is still in useable form and thus would not have been replaced by 

normal fleet turnover. These requirements ensure that emission reductions from normal fleet 

turnover that have already been accounted for in the future baseline emission inventories

underlying a SIP attainment demonstration are not treated as surplus. 

These general provisions of the 2005, 2008 and 2011 guidelines, together with the categoryspecific provisions discussed in sections V.B and V.C below, ensure that funded incentive 

projects will achieve emission reductions that are not already required under the CAA or 

state/local law.

Enforceability

The Emission Reduction Report references and describes the specific funding criteria in the 

2005, 2008 and 2011 Carl Moyer Program guidelines that ensure that emission reductions can be 

independently verified and enforced by CARB and the District. For a project to be considered for 

funding, a complete application containing detailed project information must be submitted by the 

applicant to the District.16 Once the District has selected a project for funding, the District must 

execute a contract with the grantee, and each such contract must include: (1) the name and 

contact information of the grantee; (2) specified timeframes for “project completion” (the date 

the project post-inspection confirms that the project has become operational) and “project 

implementation” (the project life used in the project cost-effectiveness calculation); (3) detailed 

information on both baseline and new vehicles, equipment, and/or engines, including 

documentation adequate to establish historical annual usage; (4) requirements for the grantee to 

maintain the vehicle, equipment and/or engine according to the manufacturer’s specifications for 

the life of the project; (5) annual reporting requirements; (6) a provision authorizing the District, 

CARB, and their designees to conduct fiscal audits and to inspect the project engine, vehicle, 

and/or equipment and associated records during the contract term, and (7) requirements to 

maintain and retain project records for at least two years after contract expiration or three years 

after final project payment, whichever is later.17 To verify equipment activity data, the 

guidelines include requirements for grantees to either install operational hour meters or to keep 

fuel logs, purchase receipts, or ledger entries specific to the funded equipment.18 The guidelines 

also include requirements for pre- and post-project inspections, to verify that information 

provided by a project owner is consistent with actual operating equipment, and provisions 

specifying the consequences of contract non-performance.19 Finally, information specific to each 

 12 Emission Reduction Report at 9. 13 Id. at 9. 14 Id. at 6-8. 15 Id. at 7. 16 Id. at 6. 17 Id. at 6-7. 18 Id. at 10-11.

19 Id. at 6-7.
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project is available to the public for specified periods of time20 and may be obtained through 

submittal of a request under the California Public Records Act.21 

These general requirements of the 2005, 2008 and 2011 guidelines, together with the categoryspecific provisions discussed in sections V.B and V.C below, ensure that emission reductions can 

be independently verified, that the public has access to emissions-related information, and that 

required actions are practicably enforceable consistent with EPA guidance on practical 

enforceability.

Permanence

The Emission Reduction Report describes the requirements in the Carl Moyer guidelines that 

help ensure that emissions reductions are permanent.

22 Specifically, the Emission Reduction 

Report identifies the portions of the 2005, 2008 and 2011 Carl Moyer Program guidelines that 

require that old engines be destroyed, that grantees document such destruction, and that contracts 

contain requirements for two time frames, “project completion” and “project implementation,” to 

ensure that the District and ARB can fully enforce the contract during the life of the Carl Moyer 

Program-funded project.23 These contract provisions24 enable EPA and the public to evaluate 

the duration for which the District attributes emission reductions to a particular project and to 

determine whether that duration adequately covers the period during which the reductions are 

relied upon in a SIP.

These general provisions of the 2005, 2008 and 2011 guidelines, together with the categoryspecific provisions discussed in sections V.B and V.C below, ensure that funded incentive 

projects will achieve emission reductions that are permanent.

B. Carl Moyer Program Off-Road Equipment: Repower, Replacement, or Retrofit

Section IV.B of the Emission Reduction Report describes the requirements of the Carl Moyer 

Program guidelines specific to off road equipment repowers, replacements and retrofits and how 

these requirements provide for emission reductions that adequately address the four integrity 

elements. Section IV. B refers to the following as the applicable guidelines for these project 

types: 

• 2005 Moyer Program Guidelines, Part II, Chapter 5, Compression-Ignition Off-Road 

Equipment 

• 2008 Moyer Program Guidelines, Part I, Chapter 5, Off-Road Compression-Ignition 

Equipment 

 20 The guidelines require the District to keep for each funded project a “project file” (which generally includes a 

copy of the application, a completed pre- and post-inspection form, and the annual reports submitted by the grantee) 

and to keep each “project file” for a minimum of two years after the end of the contract term or a minimum of three 

years after final payment, whichever is later. See, e.g., 2011 Carl Moyer Program Guidelines, chapter 3, section V at 

3-25, section X.6, section AA.3, section BB.1.(G), and section DD.3. 21 See Cal. Gov’t Code sections 6250-6276.48. 22 Emission Reduction Report at 11-12. 23 Id. at 9-10. 24 Id. at 9-10.
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• 2011 Moyer Program Guidelines, Part 1, Chapter 7, Off-Road Compression-Ignition 

Equipment 

Section IV. B of the Emission Reduction Report also refers to Chapter 9, Off-Road Equipment

Replacement, of the 2011 Moyer Program Guidelines.

Quantification

The Emission Reduction Report identifies the specific tables in the 2005, 2008 and 2011 Carl 

Moyer Program guidelines that contain the engine emission factors and load factors for different 

equipment types necessary to calculate emission reductions.25 The Emission Reduction Report 

indicates that the 2005 emission factors reflect preliminary emission data based on the 

OFFROAD model. For the 2008 and 2011 guidelines, the certified emission standards and Tier 

designation for the engine used to calculate emission reductions must be determined from engine 

emission standards adopted by ARB and/or U.S. EPA through a public process.26 Along with the 

required activity level documentation27 and the equations in Appendix C of each of the 

guidelines, the data in the identified tables ensure that emission reductions from off-road 

equipment: repower, replacement, or retrofit projects can be quantified using reliable and 

replicable methods.

Surplus

The Emission Reduction Report indicates that the 2005 guidelines includes a list of engine 

standards that would preclude engines from being surplus if they are subject to these and that the 

2008 and 2011 guidelines state that no funded projects can count towards a fleet’s regulatory 

requirement for the duration of the project life.

28 The Report also discusses the requirements in 

the 2008 and 2011 guidelines that help ensure the new units replace existing units that are in use 

(e.g. requirements that replacement equipment serve the same function and perform the same 

work equivalent as the old equipment and that horsepower ratings between the new and old units 

are similar to each other).

29 These requirements support the surplus criterion for projects funded 

under these guidelines.

Enforceability

The Emission Reduction Report identifies additional compliance requirements specific to this

source category. Specifically, the report references the portions of the 2005 guidelines that 

identify all the information that the applicant must submit in a project application to be eligible 

for funding for this project type and the requirement of a functioning hour meter.30 For the 2008 

guidelines, the report specifies that baseline activity be based on historical hours of operation on 

 25 Emission Reduction Report at 11-12. 26 See Emission Reduction Report at 11-12; 2008 Moyer Program Guidelines, Part I, Section IV.a.(7) at V-6; and 

2011 Moyer Program Guidelines, Part 1, Section D.1.(C) at 7-5.. 27 Emission Reduction Report at 10-11. 28 Id. at 10.

29 Id. at 12-13. 30 Id. at 12-13.
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the average of the two previous years’ use or two years of historical fuel usage documentation

and that future reported hours of operation be based only on readings from an installed and fully 

operational hour meter.31 For the 2011 guidelines, the report specifies that reductions be based 

upon readings from an installed and fully operational hour meter or if fuel usage is used, then future 

annual fuel usage must be based on fuel logs, purchase receipts, or ledger entries specific to the 

funded equipment. 32 Additionally, the Emission Reduction Report describes the requirement that 

grantees demonstrate that they owned and operated the old equipment in California for the previous 

two years. 33 These requirements support the enforceability criterion for projects funded pursuant 

to these guidelines. 

Permanence

The Emission Reduction Report identifies additional requirements concerning the timeline for 

destruction of the old unit for this project type.

34 Recordkeeping and reporting requirements35

(e.g., the requirement that the grantee demonstrate that it owned and operated the old equipment 

in California for the previous two years) provide further documentation of the emission 

reductions from an Off-Road CI engine replacement project that occur in the San Joaquin Valley.

These requirements support the permanence criterion for off-road repower, replacement and 

retrofit projects funded pursuant to the 2005, 2008 and 2011 guidelines.

C. Carl Moyer Program Portable and Stationary Agricultural Sources Repower 

Projects

Section IV.C of the Emission Reduction Report describe the requirements of the Carl Moyer 

Program guidelines specific to repowers of portable and stationary agricultural Sources and how 

these requirements provide for emission reductions that adequately address the four integrity 

elements. Section IV.C refers to the following as the applicable guidelines for these project 

types:

• 2005 Moyer Program Guidelines, Part II, Chapter 10, Agricultural Sources 

• 2008 Moyer Program Guidelines, Part I, Chapter 10, Agricultural Sources 

• 2011 Moyer Program Guidelines, Part I, Chapter 10, Portable and Stationary 

Agricultural Sources 

Quantification

The Emission Reduction Report does not identify the specific tables in the 2005, 2008 and 2011 

Carl Moyer Program guidelines that contain the engine emission factors and load factors for 

different equipment types necessary to calculate emission reductions but we note that they are: 

• 2005 Moyer Program Guidelines: Appendix B, Tables B-12 and B-13

 31 Emission Reduction Report at 10-11. 32 Id. at 11. 33 Id. at 11. 34 Id. at 13-14. 35 Id. at 10-11.
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• 2008 Moyer Program Guidelines: Appendix B, Tables B-11 and B-25

• 2011 Moyer Program Guidelines: Appendix D, Tables D-10 and D-14.

The Report specifies that the guidelines require the use of an hour-based formula for these types of 

projects; a fuel-based formula can be used if two years of historical fuel logs or purchase receipt 

documentation are provided by the grantee.36 The Emission Reduction Report also highlights that 

engines must be certified or that clearly defined alternative documentation and testing are 

required when certification is unavailable.37 For projects where an existing engine is replaced by a 

natural gas engine or electric motor, the Emission Reduction Report specifies that the 

quantification protocol ensures that only surplus emission reductions are calculated.38 Along with 

the required activity level documentation39 and the equations in Appendix C of each of the 

guidelines, the data in the identified tables ensure that emission reductions from portable and 

stationary agricultural projects can be quantified using reliable and replicable methods.

Surplus

The Emission Reduction Report indicates that this project type is subject to regulation under the 

CA Stationary Engine Airborne Toxic Control Measure (ATCM), the CA Portable Engine ATCM, or 

District Rule 4702.40 The Report indicates that the 2008 and 2011 guidelines include an 

implementation document that has the appropriate project lifetimes based on compliance deadlines 

by project type and year.41 The Report also clarifies the requirement in the 2011 Guidelines for 

portable farm equipment which can have a project life for past the compliance dates, but are only 

considered surplus until the compliance date.42 These requirements support the surplus criterion 

for projects funded under these guidelines.

Enforceability

The Emission Reduction Report identifies additional compliance requirements specific to this

source category. Specifically, the report references the portions of the 2005, 2008 and 2011

guidelines that require operational hour meters to verify activity levels.43 The report also 

identifies the requirement to keep fuel logs or purchase receipts.44 These requirements support the 

enforceability criterion for projects funded pursuant to these guidelines. 

Permanence

The Emission Reduction Report references and describes requirements that ensure the

destruction of the old unit for this project type.45 In addition, the 2005 “Minimum Application 

 36 Emission Reduction Report at 15. 37 Id. at 15. 38 Id. at 16.

39 Id. at 10-11. 40 Id. at 15. 41 Id. at 16. 42 Id. at 16. 43 Id. at 15. 44 Id. at 15. 45 Id.at 16.
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Information” for this project type require that the application state the percent of time operated in 

the District46, which provides further documentation that the emission reductions occur in the 

San Joaquin Valley. The 2011 guidelines require that engines regulated under the Portable 

Engine ATCM be registered (or permitted) in the air district to be eligible for repower47, which 

provides further documentation that the emission reductions occur in the San Joaquin Valley.

These requirements support the permanence criterion for off-road repower, replacement and 

retrofit projects funded pursuant to the 2005, 2008 and 2011 guidelines.

D. Prop 1B Program: On-Road Vehicle Replacement Projects

California voters approved Proposition 1B in November 2006, authorizing the Legislature to 

appropriate $1 billion in bond funding to the CARB to reduce air pollution emissions and health 

risks from freight movement along California’s priority trade corridors.48 CARB staff developed 

the initial Proposition 1B: Goods Movement Emission Reduction Program Guidelines for 

Implementation in consultation with stakeholders, including: air districts, metropolitan planning 

organizations, port authorities, shipping lines, railroad companies, trucking companies, harbor 

craft owners, freight distributors, terminal operators, local port community advisory groups, 

community interest groups, and airports. Updates to the Guidelines are based on evaluating 

advances in technology, changes in equipment costs, regulatory actions, demand for Program 

funds, and other new information that influences the design of project specifications.49 Section 

IV.D of the Emission Reduction Report describes the requirements of the Prop 1B guidelines for 

on road vehicle replacements and how they address the four integrity elements. 

Quantification

The Emission Reduction Report indicates that emission reductions should be calculated using the 

publicly available “Project Benefits Calculator” and that the emission factors are based on in-use 

testing.50 The publicly available Project Benefits Calculator uses vehicle miles traveled, which 

must be recorded and reported51, together with emission factors to determine emissions. The 

Report states that emission factors for diesel heavy-duty trucks are based on in-use testing of Class 7 

and Class 8 diesel trucks and are the same ones used for the California On-Road Heavy-Duty Diesel 

Vehicles (In-Use) Regulation and used in EMFAC2011. 52 These provisions of the 2008 and 2010

guidelines require grantees to use well-established, publicly available emission factors and 

calculation methods and thereby ensure that emission reductions from on road vehicle 

replacement projects can be quantified using reliable and replicable methods.

 46 2005 Moyer Program Guidelines, Part II, Table 10-4 at X-14 47 2011 Moyer Program guidelines, Part I, Section C.7.(B) at 10-9. 48 Proposition 1B Program: Goods Movement Emission Reduction Program, Final 2013 Guidelines for 

Implementation, adopted January 25, 2013, at pp. 1-12.Available at

http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goods_movement_2013_program_guidelines_for_implementat

ion.pdf

49 Id 50 Emission Reduction Report at 19-20. 51 Id. at 19. 52 Id. at 20.
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Surplus

The Emission Reduction Report describes the requirements in the Prop 1B guidelines that help 

ensure that emissions reductions are surplus.53 Specifically, the Emission Reduction Report 

identifies the portions of the 2008 and 2010 Prop 1B guidelines that state that emission 

reductions cannot be required by any federal, state or local regulation or legal mandate in order 

for projects to be funded. 54 The Report also describes recordkeeping, reporting and application 

requirements55 that ensure that historic and future emission estimates correctly represent 

emissions occurring in the San Joaquin Valley. Pre-inspection requirements described in the 

Report56 ensure that the unit to be replaced is still in useable form and thus would not have been 

replaced by normal fleet turnover – that is, emission reductions from normal fleet turnover that 

have already been accounted for in the future baseline emission inventories underlying a SIP 

attainment demonstration are not treated as surplus. 

These provisions ensure that funded incentive projects will achieve emission reductions that are 

not already required under the CAA or state/local law.

Enforceability

The Emission Reduction Report references and describes the specific funding criteria in the 2008 

and 2010 Prop 1B guidelines that ensure that emission reductions can be independently verified 

and enforced by CARB and the District. Funding is obligated by the District through a contract 

with the equipment owner, and each such contract must include requirements for recordkeeping, 

reporting, audits, and other verification mechanisms, including provisions requiring equipment 

owners to agree to the installation and use of an electronic monitoring device at any time during the 

contract term.57 The requirements for pre-inspections include verification of usage and 

requirements for photographic documentation.

58 The reporting requirements include: 

• Odometer reading, including the date read.

• Certification of annual California vehicle miles travelled (VMT) since last report. 

• Certification of the required percent operation in California. 

• Certification of at least 50 percent of travel within the four California trade corridors as 

well as the percentage of annual VMT in the Central Valley trade corridor. 

The Report also includes the following possible penalties for failing to comply with the terms of 

the project contract: 

• Recovery of all or a portion of program funds.

• Other fiscal penalties on equipment owners based on the severity of the nonperformance.

• Cancellation of the contract.

 53 Emission Reduction Report at 20-21. 54 Id. at 20. 55 Id.at 17-19. 56 Id. at 18. 57 Id. at 18. 58 Id. at 18.
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• A ban on the equipment owner’s ability to participate in future State incentive 

programs.59

These requirements of the 2008 and 2010 guidelines ensure that emission reductions can be 

independently verified and that required actions are practicably enforceable consistent with EPA 

guidance on practical enforceability.

Permanence

The Emission Reduction Report describes the requirements in the Prop 1B guidelines that help 

ensure that emissions reductions are permanent.

60 Specifically, the Emission Reduction Report 

identifies the portions of the 2008 and 2010 Prop 1B guidelines that require: (1) a demonstration 

that both replaced (old) and replacement (new) truck are used similarly in the San Joaquin 

Valley, and (2) documentation the destruction of the replaced equipment.61 Recordkeeping and 

reporting requirements required by contract62 (e.g., requirements to certify that at least 50 

percent of travel is within the four California trade corridors and to provide the percentage of 

annual VMT in the Central Valley trade corridor) provide further documentation of the emission 

reductions from a Prop 1B truck projects which occur in the San Joaquin Valley. The project life, 

during which the equipment owner is obligated under contract to maintain and operate funded 

equipment, enable EPA and the public to evaluate the duration for which the District attributes 

emission reductions to a particular project and to determine whether that duration adequately 

covers the period for which the reductions are relied upon in a SIP.63 These provisions of the 

2008 and 2010 guidelines ensure that funded incentive projects will achieve emission reductions 

that are permanent.

VI. EPA’s Recommendations for future Reports 

EPA recommends the following revisions for future Emission Reduction Report.

• Include enough information on each project for the public and EPA to be able to calculate the 

emission reductions of each project. 

• Include section describing how the public can request more information on emission

reductions. 

• Demonstrate that the projects included in such an Emission Reduction Report have not been 

previously credited for example by providing comparable project ID numbers.

• Both Carl Moyer and Prop 1B guidelines go through periodic reviews and new version of the 

guidelines are released without changing the date of the guidelines (e.g. the 2011 Carl Moyer 

Guidelines were first released on April 28, 2011 and have had revisions on January 6, 2012; 

March 29, 2012; February 8, 2013; March 27, 2013; October 30, 2013; November 26, 2013; 

April 1, 2014; and July 11, 2014). CARB should clearly state which version of the guidelines 

 59 Emission Reduction Report at 19. 60 Id. at 21-22. 61 Id. at 21. 62 Id. at 19. 63 Id. at 22.
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are used or explain why the revisions do not impact the integrity of the emission reductions, 

as compared to the cited guideline.